Other freedom to depreciate cases

Article 12.3 of the LIS refers in letters a) and d) to the possibility of freely amortizing :

• The elements of tangible and intangible fixed assets and real estate investments of the public limited companies and limited liability companies used for carrying out their activities, acquired during the first five years from the date of their qualification as such.

• The tangible or intangible fixed assets of entities that are classified as priority associative farms in accordance with the provisions of Law 19/1995, of July 4, on the modernization of agricultural farms, acquired during the first five years from the date of their recognition as a priority farm.

• Assumption of freedom of amortization in the automotive industrial sector

The sixteenth Additional Provision of the LIS regulates a free amortization assumption for investments made in the electric, sustainable or connected mobility value chain in the automotive industrial sector that may be made in the tax periods ending between April and June 30 2021

For these purposes, investments in new items of tangible fixed assets that involve the sensing and monitoring of the production chain, as well as the implementation of manufacturing systems based on modular platforms or that reduce the environmental impact, related to the automotive industrial sector, made available to the taxpayer and that come into operation between April 2, 2020 and June 30, 2021, may be freely amortized, provided that, during the 24 months following the start date of the tax period in which the acquired items come into operation, the total average workforce of the entity remains with respect to the average workforce for the year 2019.

Therefore, if these investments have not been fully amortized for tax purposes in the tax periods ending between April 2, 2020, and June 30, 2021, the portion that has not been amortized for tax purposes cannot be freely amortized in subsequent tax periods.

The properties will not be eligible for the freedom of amortization regulated in this provision.

The maximum amount of the investment that may benefit from the free amortization regime will be 500,000 euros.

To apply this assumption of freedom of amortization, taxpayers must provide reasoned report issued by the Ministry of Industry, Trade and Tourism to qualify the taxpayer's investment as suitable. This report will be binding on the tax authorities. This measure is under the Temporary National Framework for support measures to support the economy in the context of the current COVID-19 outbreak , following European Commission Decisions SA56851(2020/N) of 2 April 2020, SA.57019 (2020/N) of 24 April 2020 and SA.58778 (2020/N) of 22 October 2020.

Filling in form 200

When the freedom of amortization is applied or has been applied to any of the elements referred to in the aforementioned letters a) and d) of article 12.3 and the Sixteenth Additional Provision of the LIS, the following adjustments must be made in boxes [ ] and [00310] "Other cases of freedom of amortization (art. 12.3 a) and d) and DA 16 LIS)" on page 12 of form 200:

• In box [00310] of decreases, the excess amortization that over the accounting amortization related to any of the elements or investments referred to, is tax deductible in the tax period subject to declaration, will be recorded.

• In box [00309] of increases, the amount of the amortizations related to any of the elements or investments referred to, recorded in the tax period subject to declaration and which, by application of the aforementioned tax regulations, had already been deducted in previous tax periods through the corresponding decrease or negative adjustment to the accounting result, will be recorded. Likewise, in the case of transfer of item that has benefited from free depreciation, in the tax period in which it is transferred, the amount of negative adjustments made previously and that have not yet been positively integrated into the tax base must be included in this box.